The S&P/TSX Composite Index continues to hit new all-time highs this month. As of this writing, the Canadian benchmark index is up by 26.11% from its 52-week low levels. While the uptick in the index shows the broader market is rallying, not every stock is following the trend. Some high-quality investments from the energy industry are still lagging behind the rest of the market.
Investors seeking the opportunity to invest in long-term winners at a bargain have the perfect opportunity. Today, I will discuss one energy stock that is too attractively priced to ignore for your self-directed investment portfolio.
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Cenovus Energy
Cenovus Energy (TSX:CVE) is a Calgary-headquartered, $35.20 billion market-cap integrated energy company. It has operations producing crude oil and natural gas throughout Canada, the US, and the Asia-Pacific region. The company also creates plenty of value through its oil sands assets.
As of this writing, CVE stock trades for $19.31 per share, down by over 31% from its 52-week high levels. It pays its investors $0.20 per share each quarter, translating to an annualized 4.14% dividend yield. The company’s shares have slipped significantly over the year despite boasting solid fundamentals.
Is the business strong?
Despite the price chart above showing what seems to be an abysmal performance on the stock market, the business is going strong. Cenovus’s upstream operations are solid, and it has plenty of expansion projects to improve upstream operations further. The first quarter of 2025 saw CVE report the production of 818,900 barrels of oil equivalent per day, getting close to its all-time high production levels. Its downstream segment also saw a 665,400 barrels per day throughput for crude oil.
According to its quarterly report, its year-over-year adjusted net profit dropped to $859 million in the first quarter, but its profit increased fourfold. The $2.2 billion in adjusted funds flow from the quarter left CVE stock with almost $1 billion in free funds flow to return to shareholders as dividends or reinvest in capital programs.
Foolish takeaway
Cenovus Energy stock seems like an attractively priced investment at current levels, and that’s because it most likely is. The company has several major projects nearing completion, like West White Rose and Narrows Lake. According to estimates, the projects will start producing within the next 12 months. These assets can deliver substantial returns, potentially sparking a significant turnaround in CVE stock for its performance on the stock market.
Since it is affected heavily by the prices of underlying commodities, Cenovus Energy stock is susceptible to volatility in energy prices. Stable oil prices or higher prices can spell great news for CVE stock. However, a significant decline in oil prices can have a negative short-term impact on its performance in the stock market.
If you are bullish on the energy sector and want to invest in a stock that has plenty of upside potential with good quarterly payouts, CVE stock can be an excellent investment to consider. Just make sure you don’t invest more than you can tolerate losing if the market environment becomes volatile.
